01 Jul Ticking clock: Two-Pot System to unmask non-contributing employers

With the two-pot system only 8 weeks away, we remind employers of a saying that states “all that has been shrouded in darkness will soon be revealed”. All employers who are in arrears with contributions should be prepared to face the music as this new legislation will expose them while members are still employed. Previously, members only realised at claim stage that the employer had not been contributing when there is very little recourse available. The two-pot system will mean members in active service will monitor their values to see how their savings pot can be accessed.

Last year in August, the FSCA published an inaugural list of 3 262 employers that were allegedly in arrears with their contributions at the end of April 2023. Again, in March 2024, the FSCA published the second communication containing the names of approximately 4 100 companies that were allegedly non-compliant with section 13A of the Pension Funds Act (PFA) at the end of July 2023. The above is a proactive step by the regulator in exposing non-compliant employers.

However, the launch of the two-pot system means most members are eagerly waiting to withdraw from their savings pots once the legislation launches on September 1st, 2024. Any member whose payslip reflects a deduction of a pension contribution will be expecting some funds seeded in their savings pot and unfortunately those from non-compliant employers will make a shocking discovery of their employer’s delinquency.

Salt Employee Benefits as an administrator of industry funds wants members to be aware that they need to check with their retirement funds what their values are and whether they will qualify to withdraw from the savings pot.

In addition, Salt EB has upgraded its digital member portal to allow members to view the fund balance of the four pots from September 2024. This will enable the members to see if they will have any funds to withdraw from September 2024. Those who may deem the balance displayed on the pots as inaccurate will have an opportunity to reach out to either Salt EB or their employer for clarification. Salt EB encourages all members to register on the web portals available to ensure they are aware of their eligibility to claim from 1 September 2024.

Bianca S. Moyo | Senior Communications Manager | Salt Employee Benefits.